The craft brewing industry has seen tremendous growth in the past few years. In 2012, there were 1292 craft breweries in the US and 1,124 brewpubs, a growth rate of more than 20% over the previous year. More and more people are getting into the business of craft beer, but how many really understand what’s involved? There’s more to successfully thriving in the industry than brewing your product.
Let’s start with a few points you need to consider when launching a new brand or starting to distribute in a new state. Once, your growth was only limited by tank sizes and capacity and the time it takes to brew a certain beer. Suddenly, it’s also limited by the time it takes to process paperwork. It’s incredibly important that when launching new products, everyone is aware of the regulatory hurdles and timelines.
- Trademark issues – As the number of breweries increases, these type of issues are coming up more frequently. It’s even appearing in the mainstream press; listen to Public Radio’s Here and Now show on this topic. You may think your new beer’s name is totally unique, but chances are if it’s a pun on the word Hops or Rye, someone else is already selling it.
- Pre-COLA Product Evaluation and Certification of Label Approval (COLA) submission – Formulation can be the most difficult part for new breweries as it can be difficult to know what is and isn’t exempt. This first step in the COLA process can take months of back and forth, and be a real bottleneck, but you can’t net a single sale until you get your COLA approved by TTB.
- State brand and label registrations – These can be time consuming, especially because each state requires different forms and supplemental information. For example, in Texas they even require a chemical analysis to accompany any new registrations.
- State permitting – This can include getting an alcohol supplier permit with the state ABC, getting licensed with the Secretary of State, or registering for payroll/unemployment taxes and income tax/gross receipts taxes.
- Entering into trade agreements with distributors – With exceptions, to get your product to market in other states you must sell to distributors within that state. Franchise laws within the various states can range from no issues for using different distributors to very strict about who you use, what territories they have, and what brands they sell.
ShipCompliant now offers a package specifically for breweries that is designed to simplify compliance. ShipCompliant will automatically pre-populate your registration packets and monthly state reports, help you submit COLA applications right the first time and identify brands that might be confusingly similar to your own. To learn more, check out the press release on the launch of the new ShipCompliant Beer Edition.